Journalising end of year closing entrires

Skate 'n' Surf began operations on 1 June, buying and selling surfboards, skateboards, wetsuits and the protective gear for skateboarding. The structure of the business is that of a sole trader. The business employed a sales assistant during the month who is to be paid fortnightly. Tax is deducted from the employee's wages (PAYG withholding tax) and remitted to the Australian Taxation Office (ATO) on a quarterly The business has not registered with the ATO for the goods and services tax (GST) and has elected to use the accrual basis of accounting. Accounting records The business records all transactions in the general journal. These transactions are then posted to the appropriate account(s) in the general ledger and the accounts receivable or accounts payable subsidiary ledgers, where separate accounts are maintained for each customer or supplier. Chart of accounts The chart of accounts for Skate 'n' Surf contains the accounts and account numbers below. 100 Cash at bank 110 Accounts receivable 120 Inventory 130 Prepaid insurance 171 Shop equipment (cost) 172 Accumulated depreciation - shop equipment 200 Accounts payable 210 PAYG withholding payable 220 Superannuation payable 230 Bank loan 300 Capital 310 Drawings 320 Profit or loss summary 400 Sales revenue 410 Sales returns and allowances 420 Discount received 500 Cost of sales 600 Advertising expense 610 Depreciation expense 620 Discount allowed 630 Electricity expense 640 Insurance expense 650 Interest expense 660 Postage and stationery expense 670 Superannuation expense 680 Telephone expense 690 Wages expense 1 Transactions June 1 The owner opened a bank account for the business with a deposit of $35,000. This is capital provided by him. Purchased display stands, shelving etc. (shop equipment) from Shop Displays Pty Ltd for $35,000 and computer equipment for the shop from Computer Wizards for $5,000. These were paid for with a loan of $38,000 from the bank and cheque for $2,000 from the business bank account. The bank loan is repayable over 4 years. 2 Paid $5,040 for a 1-year Insurance policy covering fire, theft, and public liability 2 Paid $1,090 to Local Newspapers for advertising for the shop for the month. 5 Purchased inventory (skateboards and protective gear) from Excitement plus for $24,000 on terms on net 30. 7 Purchased surfboards and wetsuits from Surf Imports for $21,000 on terms of 10/10, 1/30. B Credit sale to Serious Fun of skateboards and protective gear for $5,500 (cost of sales $2,700). This customer was given terms of 5/10, n/30. Cash sale of a skateboard and protective gear for $590 (cost of sales $220). 11 Cash purchase of postage stamps and stationery from Australia Post for $190. 12 Credit sale to Surfing World of various inventory items for $7,940 (cost of sales $4,900). Terms net 30. 12 Returned some protective gear to Excitement plus that was faulty and received an adjustment note (credit note) from them for $180, 13 Received a cheque from Serious Fun for the amount owing by them after deducting the prompt payment discount. 14 Paid Surf Imports the amount owing to them less the prompt payment discount 17 Credit sale to Academy Diving School of 15 wetsuits at a discounted price of $390 each on terms of net 15. Cost of sales $5,100 23 Paid Excitement Plus $3,800 of the amount owing to them. Issued an adjustment note (credit note) to Academy Diving School for 1 wetsuit at $390 each that was not the size they required. The cost of the wetsuit to us 24 was $340 and it was put back into inventory 24 Purchased wetsuits from Surf Imports for $8,600 on terms of 10/10, 1/30. 25 Credit sale to Serious Fun of skateboards for $8,200 (cost of sales $4,100). Terms 5/10, 1/30. 27 Received and banked a cheque from Academy Diving School for the amount owing by them. 30 A repayment of $1,000 was made on the bank loan. 30 The owner cashed a cheque for $550 to pay wages to Scott Walker the sales assistant of $600 less PAYG Withholding of $50. he end of month adjustments are below. . Depreciation on shop equipment for the month is 10% p.a. prime cost (straight line). . One-twelfth of the insurance expired. F. Superannuation payable for the month is 10% of the gross wages paid. 1. Interest charged on the bank loan for the month was $160. he transactions above have been journalised and posted. The statement or profit or loss for June is below. Skate 'n' Surf Statement of profit or loss for the period 1 June to 30 June 20xx Revenue Sales revenue Sales revenue 28,080 Less: Sales returns and allowances 390 Net sales revenue 27,690 Less: Cost of sales 16,680 Gross profit 11,010 Other revenue: Discount received 2,100 13,110 Expenses Advertising expense 1,090 Depreciation expense 333 Discount allowed 275 Insurance expense 420 Interest expense 160 Postage and stationery expense 190 Superannuation exepnse 57 Wages expense 600 Total expenses 3,125 Net profit/(loss) $9,985